Adidas outpaces Nike in North America, China; expands online

Shares in Adidas rose to a record high on Thursday after the German sportswear firm reported a bigger-than-expected increase in first-quarter sales and profits, outflanking rival Nike in North America and China and growing fast online.

After losing ground to its U.S. rival for years, Adidas launched a big marketing drive in the United States to challenge Nike on its home turf, prompting consumers to snap up its Boost running shoes and retro styles such as Superstars.

Adidas, led since last year by Chief Executive Kaspar Rorsted, confirmed its 2017 forecast for currency-neutral sales growth of between 11 and 13 percent and net income to rise by as much as a fifth to a level up to 1.25 billion euros.

"A racing start," Morgan Stanley analysts wrote in a note. "Full-year guidance reiterated but will be likely viewed as conservative."

Adidas said quarterly net profit rose 30 percent to 455 million euros (385 million pounds)on sales up 19 percent to 5.67 billion euros, ahead of average analyst forecasts for 421 million and 5.4 billion respectively.

Adidas said growth was particularly strong in ecommerce, with revenues up 53 percent, and in North America and China, where sales grew 31 percent and 30 percent respectively.

Rorsted, who took charge last October, has announced a big push online, having doubled the ecommerce sales target for 2020 to 4 billion euros from 1 billion achieved in 2016.

Nike reported sales rose just 3 percent in North America in the quarter ended Feb. 28, while they were up 9 percent in Greater China, falling short of double-digit growth for the first time in at least nine quarters.

German rival Puma has also reported strong demand in the first quarter, with sales up a currency-adjusted 17 percent in the Americas, prompting it to lift its profit and sales guidance for 2017.

But Nike is still preeminent in the United States, increasing its share of the market for classic footwear to 78 percent in March, according to data from market intelligence firm NPD, with Adidas on 10 percent and Puma at 3 percent.

Adidas also reported a rebound in sales for its struggling Reebok brand, with quarterly growth up 13 percent, compared to just 6 percent in 2016, which Adidas said was driven by the training category and retro styles.

Adidas shares, which has already gained two thirds in the last year to trade at a big premium to Nike, were up 3 percent at 0735 GMT to test record highs and lead gainers on the German blue-chip index.